Hospitality industry dealt huge blow as alcohol duty set to rise

Tuesday 12 December 2023

Hospitality was dealt a massive blow today as States Members voted to put up alcohol duty against the warnings of industry leaders.

Politicians voted to increase alcohol duty by 4.5% from 1 January – putting an end to last year's freeze.

The Council of Ministers initially proposed an 8.9% hike in the price of alcohol duty for 2024.

However, following an amendment by a Scrutiny panel to freeze duty in a bid to help struggling hospitality firms, Ministers lodged a "compromise" amendment to their own proposal.

States Members today voted 27 to 19 in support of altering the amendment.

So, if the Government Plan is approved at the end of the debate this week, duties on spirits, wine, cider and beer will rise by 4.5%.

Pictured: Earlier this week, the JHA said that the hospitality industry is the "heartbeat" of Jersey, but described recent cost increases as "terrifying".

A large proportion of the Assembly spoke on the issue, with Home Affairs Minister Helen Miles raising the public health implications of extending the freeze on alcohol duty, and the pressure on emergency services.

Others referenced the pressures on the hospitality industry following the pandemic.

On Sunday night, the Jersey Hospitality Association urged politicians to vote against the 4.5% duty increase and called for a freeze in a letter to States Members.

In it, they said that it was "clear and proven that duty rate increases do not have an impact on controlling the volume of alcohol consumption in Jersey".

Ana and Marcus Calvani, Co-Chief Executive Officers of the JHA, instead called for a duty freeze – describing it as "a pause, giving us a chance to fix this by getting Health, Home Affairs, Economic Development, Treasury and Hospitality together".

Writing on behalf of the JHA board and members, the pair said that the hospitality industry is the "heartbeat" of Jersey, but described recent cost increases as "terrifying".

The Co-CEOs acknowledged the health concerns associated with the island's alcohol consumption, but said that alcohol duty increases have a "negative impact on mental health, lonely consumption, unregulated drinking, pre-loading, binge drinking and alcohol related domestic issues".

Pictured: Marcus and Ana Calvani, Co-Chief Executive Officers of the Jersey Hospitality Association. (Max Burnett)

They added: "All that raising duty does in Jersey, other than providing an easy tax to government, is drive people to buy in the discounted off-licence trade while penalising hospitality businesses (the on-trade) that serve alcohol in controlled, regulated, measured and safe environments.

"If the purpose of excise duties is to change behaviour among the general population, then it is clearly not working. All that is happening is that Jersey becomes a more expensive place to live and visit, and businesses go to the wall. Raising duty yet again in this government plan will just further these problems."

This smaller duty rise is expected to decrease the Government's estimated revenue for 2024 import duties by £1,033,000.